Seventy-three per cent of CFOs said it is not a good time to take on more risk.
Photo: Erin Jonasson

The federal government’s performance is the biggest drag on the confidence of chief financial officers, putting a stay on their investment decisions even though funding is cheap and plentiful.

Discontent with federal government policy is now as bad as it was in the dying months of the former Labor government, a sharp contrast to late 2013 when CFO confidence skyrocketed after the Coalition came to power.

This has combined with the sharp drop in commodity prices and the “multi-speed economy” to put a brake on finance bosses’ willingness to invest and take new risks, says the Deloitte quarterly CFO Survey for the December quarter.

More than 90 companies across all major sectors got their hands on another $151 million in cash, mainly by making sure they were paid quicker in 2014.

But the cash released from working capital cycles this year comes on top of a much bigger improvement in 2013, when a big focus on getting paid faster and inventory management saw about $1.4 billion in cash released, according to analysis by McGrathNicol.

“The previous year was 4.6 days’ improvement compared to 0.3 days this year – so the improvement really has slowed. But the trend was still there,” McGrathNicol partner Jason ­Ireland said.

Mr Wehby started at Sydney Airport in 2011. The company said he has had many “airport transaction” and asset management jobs around the world and has worked in investment banking in Australia and the UK.

ME Bank’s new chief risk officer Carlo Cataldo says the bank wants the new comprehensive credit reporting regime to be compulsory as it could open new lending opportunities to people excluded from borrowing.

Mr Cataldo, who took up his new job at the super fund backed bank last Monday, is also a former chairman of the Australian Retail Credit Association.

Smaller lenders hope the CCR will give them access to more data on borrowers they don’t already lend to, giving them the ability to price risk more accurately and pick up new customers.

CFOs would prefer to take the temporary economic pain most think the budget will bring than endure more uncertainty over its prospects.
Photo: Glen McCurtayne

Almost two-thirds of chief financial officers say the budget will hurt the economy but most would swap the present uncertainty over how much will pass the Senate for the short-term pain of the cuts it would introduce.

The latest quarterly survey of CFOs by Deloitte finds 62 per cent think it will be negative for the economy and 38 per cent believe it will hit their own company.

But 40 per cent said the budget would have no impact on their business and most continued to foresee ­significant rises in revenue, margins, cash flow and staff numbers over the next 12 months. About 72 per cent supported the government’s plans for the “rate of fiscal repair” (or balancing the budget), or said it should happen faster.

Mr Bekier became CEO and managing director of Echo - which owns The Star casino in Sydney and Jupiters on the Gold Coast, among others - on April 11 after former chief executive John Redmond announced he would be returning the US after a year in the job.

G100 president Neville Mitchell: “There are processes and a culture that is developing that I think looks at the broader impact of regulation that I don’t think was there before.”
Photo: Sasha Woolley

Chief financial officers from Australia’s largest companies have suggested more than $1.3 billion in regulatory savings across five sectors, but say any cuts must be accompanied by a cultural change in the regulators themselves.

More than a $1 billion of the savings recommended by the Group of 100 would come from changes in the way policy is formed for the highly regulated financial services sector. The other sectors covered were utilities, retail, services and manufacturing.

The recommendations to Josh Frydenberg, the parliamentary secretary to Prime Minister Tony Abbott, includes an appeal to curtail the way Australia’s financial regulators have been implementing numerous laws agreed globally in Australia, which the G100 says means they have strayed into deciding policy.

Smaller companies will no longer be able to just say they can’t afford to manage risk.

Chief financial officers and their CEOs will need to sign off on every financial report, not just the full year ones under the first revision to the ASX’s corporate governance guidelines since the financial crisis.

The third edition of the new guidelines, released on Thursday, also requires listed companies to say whether they have an internal audit function.

Under another change affecting risk management disclosures, if companies don’t have an internal auditor or an audit committee, for example, they can’t just say it is because they are too small and it is too expensive to maintain them. Companies will need to explain what other measures they have taken to monitor and minimise risk.

Years of regulatory tinkering to kick-start a retail corporate bond market will come to a head in June when legislative changes should pass that allow retail investors to buy bonds issued to institutional investors via the Australian Securities Exchange.

The new regime will also allow a less onerous prospectus to be used for retail bonds for multiple bond issues over three years, as long as the bonds are deemed “simple” enough.

The Australian Securities Exchange and some bankers insist the new mechanism will tap into demand from self-managed super funds for simple fixed-income investments.

The new national president of the business executives’ peak body the Group of 100 will be involved in consultations on tax changes this year as the government grapples with forging an agreement between the G20 to stop profit shifting while some countries change their tax regimes to compete for companies’ intellectual property.

“I think it is impossible to have a completely identical tax regime everywhere – total harmonisation is impossible,” Mr Mitchell said.